ISO Chair Bob Foster on California’s Energy Future without San Onofre

Southern California Edison recently decided to shut down the San Onofre nuclear power plant after trouble with faulty generators. This month, TPR consulted Long Beach Mayor, ISO Chair, and former SCE president Bob Foster on the impact the closure will have on energy supply in the Southland, and how the state plans to counter the impending power loss. Foster also talks demand response, California’s energy future (he thinks: renewables), and the revolutionary role storage technology will play in fostering a green energy grid. While San Onofre presents a challenge, Foster notes California’s energy agencies are more capable than ever of meeting such challenges together.

Bob Foster, Mayor of Long Beach

"We need new kinds of facilities, new gas facilities, to meet [demand]. And they’re being built. And ultimately, as I said, if we get storage that can solve a lot of those issues."
-Mayor Bob Foster

As the Mayor of Long Beach, Chair of California’s ISO, and the former president of Southern California Edison, few in California have more expertise than you to speak to the significance of SCE’s decision to permanently close San Onofre Nuclear Generating Station. What impact will decommissioning have on the state and region’s energy supply, and what provisions have been made by SCE and the State to meet demand heretofore reliant on nuclear power from San Onofre?

As far as the company, Edison, goes, they’ve made that decision based on economics. I’m not close enough to tell you whether it’s right or wrong. Obviously they felt that the long-term potential of that facility was in doubt, and it’s better to cut losses early. It’s been almost 30 years in operation, and there’s an issue with steam generators, which I’m sure will be the subject of litigation for some time. Whatever the company’s calculus is, they’ve already made it.

For the state and for the region, decommissioning does pose some issues short term and long term. Short term, we’ve been anticipating this at the ISO because it’s been doubtful that unit 3 and maybe unit 2 could restart, so for 2013 and 2014 we’ve reconfigured an existing 220 kV line called Barre-Ellis, going from two circuits to four. That gives us greater flexibility.

North of the facility, Huntington Beach units 3 and 4 were converted. Those are two old power plants that were retired. We’ve converted those to what are called synchronous condensers. Those will be able to provide voltage support. Just like water in a hose needs pressure to move, transmission lines needs voltage energy to move electricity. The problem with losing San Onofre is not just capacity—the system needs to be able to maintain its voltage levels to be able to function properly. Those synchronous condensers are like electric motors; they will provide that voltage support.

We’ve done a lot of capacitor bank upgrades at Santiago, Viejo, and Johanna substations—those have all been installed and have been in service since May.

There are new resources coming online. At El Segundo, the plant was repowered to 564 MW. That should be fully available at the end of this month. Sentinel is fully available with 800 MW, and a new plant in Walnut Creek at 500 MW is now fully on line and operating.

In addition, we’re going to do a number of Flex Alerts. Those are fully funded by the investor-owned utilities and authorized by the California Public Utilities Commission. And we’re going to utilize, to the extent that we possibly can, demand response, which involves having people cut back on their use in return for getting paid or receiving credit on their bill. Demand response and energy efficiency are part of the state’s mandated loading order as well. If we have to use it, we’ll turn to it. Obviously we’re going to try to make sure all the power plant facilities are well maintained and available for service. So that’s the short run.

In the long run, you have an issue—all the coastal plants, that’s about 7400 MW facilities from Ormond Beach all the way down to Encina, are all scheduled to go from the present system of once-through cooling with ocean water to a different system, probably cooling towers. Now how many of them get repowered, I don’t know. But that 7400 MW, and we’re going to need to either delay the once-through cooling, or repower these facilities.

Now with San Onfore retiring the amount of ocean water used in once-through cooling drops substantially. Maybe there’s a reason for a delay—I’m not saying we are going to ask for a delay, but that’s one of the possibilities. All of the agencies involved—the Public Utilities Commission, the California Energy Commission, the ISO, the Air Board, the Water Board, and the Governor’s Office—are, over the next 90 days, going to crack a long term plan for dealing with the San Onofre retirement.

Now that could be a lot of things. It will probably include some upgrades and new transmission; it could well include some additional plants or some distributed generation at the substation level; new renewables where it could come online and work properly—all of those will be considered, as well as demand-response, which I personally think has great potential, particularly if we can get a market where people who can aggregate efficiency in demand response can get paid for it.

But I can’t tell you anything about how that’s going to work right now because it’s all going to be put into a long term plan, which will be presented to the various agencies. I’m fairly confident we’ll be able to solve this and deal with San Onofre being out. There’s a great advantage to having all the agencies working well together, which they have done for several years. As you know, I’ve been involved in energy for almost 30 years in this state and I don’t think I’ve seen the agencies work as well together as I have in the last three or four years. So I’m pretty confident we’ll be able to solve this.

This is a problem; it’s not a crisis. This can be managed, and we intend to do that.

Regarding how the “problem” will be managed, you have, in prior TPR and VerdeXchange interviews, advocated Demand Response. Elaborate why demand response is always an attractive but difficult alternative to pursue.

First, the demand response that we have now is largely just paying people not to operate. The demand response of the future, if we can create a market, is a combination of potentially having people cut back on their operations, but more importantly to start installing hardware for efficiency—replacing incandescent and even fluorescent lights with LEDs; putting in variable-speed motors. If you have a market, you can have very skilled entrepreneurs to aggregate those and get paid for it to compete for new generation for efficiency gains. Without it you’re relying on regulation or one-off programs. That’s one reason why our capacity market, which we are hopefully in the process of developing, is so important to demand-response. I don’t think we’ve even scratched the surface with demand-response and efficiency.

I’ve been involved with efficiency all my life. I was instrumental in the creation of Title 24. I think the efficiency gains in demand response hold a large potential to be able to meet our future needs.

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With San Onofre’s closure, what do you see the energy mix for California and Southern Californians being in the next decade? What policies and regulations will most affect the state’s energy portfolio mix?

We’re on a path for 33 percent renewables for 2020. I think we’ll likely exceed that. In addition, there’s a vast impetus for rooftop solar, speared on by a lot of issues, from the declining cost of solar and the rate structure itself.

The rate structure, its last two blocks are really high in most utility service areas. So it’s a very fertile ground to put independent systems in. When you add all that up, the future is going to be largely renewables, with gas-powered generation backing it up, and obviously some hydro. Until we can get effective and economically competitive storage systems, that, I think, will be the mix.

Once we get, and I hope we will, storage systems that are economically competitive, then the world changes. Then even a larger portion of renewables becomes doable and probable. In the foreseeable future it’s going to be substantial additions of solar, wind, geothermal, and other renewables on the edges, and gas-powered generation backing it up. The integration of those renewables, because of their intermittency, poses issues on the system; you have to ramp up and down.

We need new kinds of facilities, new gas facilities, to meet that need. And they’re being built. And ultimately, as I said, if we get storage that can solve a lot of those issues.

Elaborate on what is presently being built?

I mentioned transmission; upgrades on capacitors; being able to put devices at the distribution level which condition power—those things are all being installed and looked at. In addition on the generation side, we are adding in Walnut Creek, for example, a brand new 500 MW plant that can ramp up and down extraordinarily quickly. Those are the kinds of things you are going to need as you get more solar, particularly rooftop solar.

The grid has to be stable. Even on a spring day, not even a summer day, you see what we can in the ‘duck chart’, which is a graph that shows load over time, a substantial drop in demand because people are running off of their solar power systems. Around 4:30, you see it start ramping up as those systems become ineffective. It shows up on our system as a huge increase in demand. In 2016, that ramp might be 13,000 MW in two hours. So we have to have the capacity on the system to be able to meet that. There are a couple plants that have those characteristics, such as the Oakley power plant.

That’s what the ISO is responsible for. We’re responsible for reliability. We look at this every day and do our best to meet that. The agencies like the PUC, Energy Commission, Air and Water, and the Governor’s Office have been remarkably cooperative. This is the best organization and integration that I’ve ever seen.

As Mayor of the City of Long Beach, one of California’s largest cities, does this change in the energy mix and the closure of San Onofre affect your city?

Well, as Edison customers it affects us, but it affects all of Southern California, probably more so in southern Orange County and in San Diego. That’s a load pocket. It could be a problem; we recognize what the problem is; we’re managing to it; and I think we’ll be successful.

Lastly, with SCE June decision to decommission San Onofre, Is nuclear in California dead as a future energy source?